Brief Discussion on the Contract Aspect of the Consumer Credit Laws in Australia
Consumer credit involves offering a person credit so that he or she has the money to buy goods or services. The responsibility for financial services in Australia is apportioned between different regulators. For the main part consumer credit is the responsibility of State governments and their Offices of Fair Trading which administer the Uniform Consumer Credit Code.
This paper focuses on the contract aspect of the consumer credit laws and analyzes the advantages and disadvantages of the related contract rules of consumer credit in Australia, before offering suggestions to reform the problems.
The main argument of the paper is that the consumer credit system should be improved in order to provide the customers with an opportunity of fair crediting and the regulations of the consumer crediting in Australia should be developed while taking in consideration both the need of the client and the interest of the creditor.
This paper is divided into four parts: the first part is a general introduction to the history of consumer credit and the present legal system about the consumer credit. The second part focuses on the contents and application of contract regulation in NCC and NCCP Act and then analyzes the advantages and disadvantages of the contract regulatory method in NCC and NCCP Act. The third part offers suggestions for contract regulation in NCC and NCCP, which are disclosure requirements practical application, managing product innovation restrictions and taking into http://www.51fabiao.org/contractlaw/2012/0222/1123254617.html account the force majeure cases while determining the credit limit for the cards, and avoiding of discrimination between credit providers.
Currently, consumer credit system is regulated successively by the Uniform Consumer Credit Code, National Credit Code and National Consumer Credit Protection Act in Australia.
The Uniform Consumer Credit Code (UCCC) has been considered as the template for credit legislation in Queensland and in other states it was adopted in accordance with existing legislative basis. Subsequently, the National Credit Code (NCC) is considered to replace the Uniform Consumer Credit Code, with modifications. NCC is applied in the same way as the UCCC, but it has been extended to covering the credit for purchasing, improvement or renovation of the residential property for investment purposes. It is important to emphasize that the contract law in Australia is based on the English contract law. In Australia the main principle while developing the contract law was the principle of equity.
Due to the NCC, all providers of credit products should be registered as the members of external dispute resolution scheme (for example, Financial Ombudsman Service). That is done in order to ensure that the consumers are provided with access to the justice.
National Consumer Credit Protection Act 2009 is an Australian Federal law, which has been developed for introducing the scheme of registration and licensing. There are the following requirements to the credit contracts, which are regulated both by NCC and NCCPA : the debtor should be the natural person or a strata corporation; the credit should be provided wholly or predominantly; the predestination of the credit should be for domestic use, for personal use or for the household purposes: purchasing, renovating or investment purposes; the interest charge should or may be done for providing credit; the